Trade Facilitation 101 – Understanding the basics

Trade Facilitation 101 – Understanding the basics

Historically trade between countries or cross-border trade has always been at the effect of red tape and disparate trade policies between countries. The entire global move towards facilitating international trade is nothing more than the simplification, harmonization and modernization of processes so as to increase the quantum and ease of doing cross-border trade.

Over the last decade, Trade Facilitation (TF) has increasingly been a priority on the international political agendas of most countries, culminating in the formation of the landmark Trade Facilitation Agreement (TFA) by the World Trade Organization (WTO), which came into force on 22 February 2017. This global agreement includes requirements for expediting the movement, release and clearance of goods, including goods in transit. It also lays down measures for cooperation amongst Customs and other TF authorities and issues of Customs compliance. Additionally, the TFA has provisions on technical support and capacity building in Trade Facilitation.

Published every year since 2003 by the World Bank, the Ease of doing Business Indexis an indicator of the Trade Facilitation health of a country. According to the official website of the Doing Business rankings, “Economies are ranked on their ease of doing business, from 1–190. A high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a local firm. The rankings are determined by sorting the aggregate scores on 10 topics, each consisting of several indicators, giving equal weight to each topic.”

And as a country, there are a plethora of possibilities for charting the Trade Facilitation agenda for your geographic region to enhance your performance on such indices, year-on-year. Here are a couple of such technology-enabled game-changers to add to your arsenal:

  • Single Window Systems
    As per the WTO, Article 10.4 of the WTO TFA calls for Member States ‘to endeavor to establish or maintain a single window, which enables traders to submit documentation and/or data requirements for importation, exportation, or transit of goods through a single-entry point to the participating authorities or agencies.’
    There is no standard structure of a Single Window (SW), since operators customize their systems based on their specific national/regional requirements and conditions. The SW could be financed by the state, the private sector or a private-public partnership.The use of Single Window facilities can be mandated or be voluntary and the services provided could vary and be free or paid.
  • Airport Cargo Community Systems (ACS)
    Most of the major airports across the globe have Airport Cargo Community Systems (ACS) for information exchange between its various stakeholders. An Airport Cargo Community System (also referred to as Cargo Community System (CCS)) is a neutral and open electronic platform aiding intelligent and secure information exchange between its stakeholders. It is a crucial tool in optimizing operational efficiencies and enabling digitalization of the end-to-end air cargo value chain.
  • Port Community Systems (PCS)
    A robust EDI-based Port Community System (PCS) is designed to automate and digitally streamline EXIM container movement in and out of Ports. It facilitates proper communication, information exchange, connectivity and digital processing of key business transactions, which can be facilitated between all the stakeholders at the port and the related Logistics value chain.

These are just some of the fundamentals of Trade Facilitation for a country. Connect with us at info@kalelogistics.com to learn more.

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